Section 4.1 Operations Management Flashcards
How can holding the right level of stock improve efficiency?
If a business orders too much stock, they will have to hold (store) that stock until it is ready to be used. Ordering too little stock means that they cannot produce the amount needed or demanded by their customers.
What are the benefits and limitations of flow production?
Benefits:
- Machinery = increase productivity
- Benefits from bulk buying = cheaper cost per unit - Lower costs and higher profit margin
- Goods produced quickly for market
Limitations:
- Automation and machinery = boring for employees = poor motivation
- Machinery very expensive = requires significant capital investment
- Machinery can break down = all production has to stop
- Production process is fixed = difficult to meet changes in customer demand
What are the benefits of lean production?
- Higher labour productivity, which reduces the production cost per unit. - Require less stock, reducing stock holding costs. - Empowers employees and increases their motivation. - Improve the quality of the final product and reduce the amount of wastage.
What are the four main functional areas in most businesses?
Human Resources (HR), Marketing, Accounts and finance, Operations
What are the benefits and limitations of job production?
Benefits: - Can meet the exact requirement of the customer = competitive advantage - Tasks are continually changing for the employees = motivation - Can charge much higher prices in relation to mass produced goods Limitations: - Requires a lot of employees = costly - Can often take a long time to produce because they’re made to order - Produce one item at a time so they do not benefit from bulk buying = cannot reduce cost per item
What are the key aspects of lean production?
Just-in-time - Ordering or manufacturing the right amount of stock that is required by the customers. - Reduces the need to hold large amounts of stock. - Aims to ensure that inputs into the production process only arrive when they are needed. - Customer orders determine what is produced - Requires complex production scheduling Kaizen - Small changes to the production process on a continual basis. Employees can often provide these changes. - Also known as continuous improvement, is an approach of constantly introducing small incremental changes in a business in order to improve quality and efficiency. - Employees are encouraged to suggest ways to improve their work.
How do we improve productivity?
Investing in more automation (machines) or better technology -> machines are faster than humans most of the time. Improving employee motivation -> can improve level of output and increase productivity. Improving employees’ skills - by training them could reduce the number of mistakes made and help them produce more quickly. Effective management - having a good manager will increase employees’ motivation and ensure that resources are used efficiently through good organisation.
What are the different methods of production?
Job production - Each product is produced individually. Occurs when each individual finished product is different. Batch production - Producing small amounts of similar products at the same time, then the whole batch can be moved to the next stage of production together. Used when a range of products or varieties is required in larger quantities. Flow production - or mass production, is where identical products are mass produced in a continuous flow on an assembly line. Used when very large quantities are produced to a standard design.
What are the advantages and disadvantages of investing in more automation?
Advantages: - Does not require as many additional cost such as employees’ wages. - Can enable a business to work for longer hours because machinery can run 24/7. - Fewer employees are needed which reduces the business’s costs significantly. Disadvantages: - Requires a large initial cost. - Takes responsibility away from employees, which can reduce motivation. - Technology can become out of date very quickly, so it needs to be updated regularly to meet the changing needs of the customers,
What is computer aided manufacture (CAM)?
Uses computers to control and manage the production process.
What are the benefits of improving productivity?
It reduces the cost of producing each unit and therefore increases the profit margin for each item made.
What is the difference between production and productivity?
Production refers to the total outputs or the number of products produced over a period of time. Productivity is a measure of efficiency - the output in relation to inputs or resources used. The most common measure is labour productivity (the output per worker).
What is lean production?
A philosophy that reduces the amount of a business’s key resources within production, e.g. reducing time, money, people or materials needed within the production process. - Approaches to management that focus on cutting out waste whilst ensuring quality. - Doing the simple things well - Doing things better - Involving employees in the continuous process of improvement - … as a result, avoiding waste and thereby reducing costs.
What is computer aided design (CAD)?
Allows designers to produce images electronically rather than hand draw them.
What are the benefits and limitations of batch production?
Benefits: - Flexible and allows a range of different products in the same production time - Variety of tasks for employees = motivation Limitations: - Requires range of machinery = costly - Required to hold wide range of stock = costly - Manufacturing defect = whole batch ruined
